Pick of the Day: EUR/CAD – Close Trade

Close Trade: 01/09/07 – 08:52 Am EST

Our trade was stopped out at 1.5350 on falling oil prices this morning. With oil diving this morning to 54 dollars a barrel, I’m looking for USD to rise in the wake of this. Oil traders will continue to watch weather reports for any cold snaps to drive up prices, so keep an eye out for that. Stay tuned for a possible trade idea on this morning events, but for now we took -45 pips loss if you jumped in at the same price I did.

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With another day of light economic activity ahead of us, I’ve decided to go with a short play with EUR/CAD. This pair has made a strong move in the last few trading sessions from approximately 1.5509 down to 1.5242 before retracing back to its current position at 1.5309. If the downtrend continues, it may be the perfect opportunity to jump in the pair now at a great price.

We may get a little bit of help in our trade from mother nature if she decides to bring back some cooler temperatures. This would increase the demand for energy and oil in the very short term, which may give the loonie a boost. So we will go short near the 38% Fibonacci retracement line and set our stop to 1.5350. We do have slight event risk with German Trade Balance at 2:00 am EST and German Industrial Production at 6:00 am EST, but both are considered to have low volatility potential. Here we go:

Short EUR/CAD at market (currently 1.5305), stop at 1.5350, pt1 at 1.5275, pt2 at 1.5250

Remember to never risk more that 1% of your account on any single trade, so please adjust your position sizes accordingly. Good luck and good trading!

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